Details continue to emerge slowly as investigation progresses

April 15, 2013

UPDATE: Federal agents have served a second search warrant as part of the investigation into Pilot Flying J, reported The Knoxville News Sentinel. U.S. Attorney Bill Killian would not give specifics or say where the warrant was served. "I can tell you that a second search warrant was issued last night," he told the newspaper. "It’s ongoing." No arrests have been made so far, said the report. Killian would not say whether any arrests appeared imminent, although he indicated the search could be part of a long-term investigation.

UPDATE: Posted on the Pilot Flying J website: "Pilot Flying J Team Members are expected to report to work at the company's Knoxville headquarters on Tuesday, April
16th as usual. The message they will receive from CEO Jimmy
Haslam will be 'Stay focused and do your job' supporting the companies' 500 travel centers and Pilot Logistics Services customers."

UPDATE: Pilot Flying J posted a statement by Jimmy Haslam on the Pilot Flying J Facebook page Monday at 6:00 p.m. EST: "The FBI secured our headquarters today and informed us they are investigating Pilot/Flying J. We will cooperate appropriately with any and all external investigations and conduct our own. I believe and trust there has been no wrongdoing. The integrity of our company always has been job No. 1."

KNOXVILLE, Tenn. -- Although details are still sketchy and the reason remains unknown, bits of information are beginning to emerge concerning the FBI's lockdown of Pilot Flying J Inc.'s headquarters in Knoxville, Tenn., Monday afternoon.

The Knoxville Police Department provided officers in support of the raid, said a report by The Memphis Commercial Appeal. "All I can say is that the FBI asked us to have some officers assist them with a search warrant," Police Chief David Rausch told the newspaper.

He said he was not informed in advance where the search was to be and did not know until the officers radioed in from the scene. Pilot employees were escorted off the corporate campus on Lonas Road.

Two men were seen exiting the Pilot data center on Weisgarber Road. One was wearing an FBI windbreaker and the other was carrying a backpack, said the report.

FBI spokesperson Marshall Stone told The Houston Chronicle that the lockdown is part of an ongoing investigation, but would not say what agents were doing inside the Knoxville building Monday.

The IRS confirmed to WATE-TV news in Knoxville Monday evening that the agency was involved in an investigation at the business, but did not provide further details. The U.S Attorney's office would not say why law enforcement was there, only saying that it was part of an "ongoing investigation."

David Smith, a spokesperson for Gov. Haslam, said the governor had been informed of the action and referred other questions to Pilot Flying J spokespersons, said The Tennessean.

In a statement provided to CSP Daily News, company spokesperson Lauren Christ said, "As of the afternoon of April 15, FBI officials have sequestered the Pilot Flying J headquarters on Lonas Drive in Knoxville. At this time, we do not know the nature of the situation. Pilot Flying J is cooperating fully with the authorities. Pilot Food Marts, Pilot Travel Centers and Flying J Travel Plazas remain open and continue to serve the public. Pilot Flying J is confident that the matter will be resolved fully."

Pilot Flying J is the truckstop and travel center business owned by the family of Tennessee Governor Bill Haslam and his brother, Cleveland Browns owner Jimmy Haslam. Jimmy Haslam stepped down as company CEO
after buying the Browns last summer. He
returned as CEO in February,
replacing former PepsiCo President John Compton. Bill Haslam has no position with the company but still has an unspecified holding in it, according to his limited financial disclosures, said the Associated Press.

It is not know if the investigation involves the Browns. The organization offered "no comment" to NBC Sports.

Based in Knoxville, Pilot Flying J has more than 650 retail locations and is the largest operator of travel centers and travel plazas in North America. The Pilot Flying J network provides customers with access to more than 60,000 parking spaces for trucks, more than 4,400 showers and more than 4,000 diesel lanes, of which more than 2,800 offer diesel exhaust fluid (DEF) at the pump. Pilot Logistics Services is one of the largest independent energy logistics companies in North America, selling and distributing more than 1.3 billion gallons of refined petroleum products and serving more than 15,000 customers. Together, Pilot Flying J and Pilot Logistics Services generate sales of approximately nine billion gallons of petroleum annually.

The company began its rise to prominence when Jim Haslam incorporated Pilot Oil in 1951 and opened his first station in Gate City, Va., the same year, said the News Sentinel. In 1965, Marathon purchased half of Pilot and loaned the company $4 million to build new stores.

The business expanded to convenience stores in 1976 and opened its first travel center in Corbin, Ky., in 1981. Pilot bought back Marathon's half-interest in 1988.

Six years later, the company announced its acquisition of 11 Pro Stop travel centers in five states, making it the second-largest truck stop chain by both the number of locations and the volume of diesel fuel pumped.

Pilot announces acquisition of 11 Pro Stop travel centers in five states, making it the nation's second-largest truck stop chain in terms of locations and volume of diesel fuel pumped.

Shakeups among the top leadership didn't phase the company, and in 2001, the News Sentinel reported that Pilot signed a deal with Marathon Ashland Petroleum LLC to combine a majority of its travel center operations. Two years after that, Pilot Travel Centers submits the winning bid of $189 million to buy Williams Travel Centers' 60 locations in 15 states.

In 2008, Marathon announced a deal to sell its 50% stake in Pilot Travel Centers for $700 million to Pilot Corp. at the same time that Pilot Corp. announced a separate deal to sell 47.5% interest in Pilot Travel Centers to CVC Capital Partners.

In 2010, the Federal Trade Commission(FTC) gave preliminary approval to a proposed merger of Pilot Travel Centers and Flying J, just months before the youngest Haslam won the governor's race.

Plunge in oil prices sets the stage for record margins and boost in in-store sales. Also In This Issue: Profitability skyrockets for top performers! Other channels seek to redefine convenience! The economy enters a new stage. The growing health-and-wellness trend. Fuel demand; oil's slide; multicultural momentum; and data, data, data!

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